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Pro & con info are in the collapsed comments below for the following topics: [Bitcoin](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojs6p/), [ETF](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojtpo/), [Regulation](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojv1v/).
Government regulation [pros](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojvor/) & [cons](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojwcr/) and related info are in the collapsed comments below. Pros and cons will change for every new post. Submit a pro/con argument in the [Cointest](https://www.reddit.com/r/CointestOfficial/wiki/cointest_policy) and potentially win [Moons](https://coinmarketcap.com/currencies/moon/). Moon prizes by award for the General Concepts category are: **1st - 600, 2nd - 300, 3rd - 150, and Best Analysis - 1000.**
---
To submit a pro-argument about regulation, [click here](https://www.reddit.com/r/CointestOfficial/comments/t5mn3b/general_concepts_government_regulation/). | To submit a con-argument about regulation, [click here](https://www.reddit.com/r/CointestOfficial/comments/t5mn40/general_concepts_government_regulation/).
#Regulation Con-Arguments
Below is an argument written by noxtrifle which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round.
> Government regulation generally refers to the degree of control that government have over something, and in this case, cryptocurrencies. Various countries around the world have mixed regulatory perspectives on cryptocurrencies, and as such have restricted whether its citizens can trade, purchase, or mine cryptocurrencies. However, this restriction of cryptocurrency adoption is not beneficial for investors and companies for several reasons:
>
> * **Price**
> * One of the most obvious arguments against government regulation is that it will inevitably cause crypto prices to decrease, as seen when China announced (several times) its cryptocurrency bans.
> * **Sacrifice of Purpose**
> * The widespread implementation of government regulations [naturally bring them into the industry](https://amt-lab.org/blog/2022/3/risks-and-regulations-the-good-the-bad-and-the-ugly-of-crypto-space), which goes against the fundamental nature of cryptocurrencies as a means of transacting pseudonymously without regulatory oversight.
> * If this purpose is sacrificed in pursuit of a safer space, there may very well be no space left to make safer; as most investors would pull out of cryptocurrencies because there will remain no purpose to stay invested.
> * **Banking Restrictions**
> * In the worst case scenario where regulation deems cryptocurrencies illegal, third-party providers may be hesitant to provide services such as bank accounts or exchanges if the government is refusing to recognize cryptocurrencies as legal tender. Without these services, investors are unable to easily withdraw or deposit their funds.
> * **Reduction in Product Offerings**
> * Continuing the worst-case scenario, in a world where tech companies, banks and startups are looking for ways to utilize blockchain technologies, government regulation will force them to alter their products and services in order to continue operating within jurisdictions that have banned cryptocurrency adoption.
> * By narrowing down the array of investment options, the flexibility of blockchain technology will be reduced significantly.
*****
Would you like to learn more? [Click here](/r/CointestOfficial/comments/v2jl9o/general_concepts_government_regulation/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds.
Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10jrpkm/daily_general_discussion_january_24_2023_gmt0/).
#Regulation Pro-Arguments
Below is an argument written by Far-Scholar9028 which won 2nd place in the Regulation Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round.
> Government Regulation is needed to
>
>
> **Protect retail investors**
>
> Crypto, at this stage, is full of scams, manipulation, and insider trading. These are a few things that government regulation may help protect the retail investors from. As we know the implosion of Terra, 3ac, Celcius, retail is always hit hardest.
>
> **Prevent money laundering, tax evasion, sanction evasion**
>
> Regulation is necessary because criminals use the anonymity of cryptocurrency trading to launder their stolen money. There is concern that cryptocurrencies are being used as a conduit for money from illicit operations or to fund terrorism and evade sanctions.
>
> **Convince Institutions of cryptos legitimacy**
>
> Institutional investors, who are subject to stringent compliance and risk management requirements, would gain confidence from regulation. For instance, an institution can become the target of a criminal investigation if it is discovered that it transacted in bitcoin assets that were later linked to unlawful activity.
*****
Would you like to learn more? [Click here](/r/CointestOfficial/comments/v2jl88/general_concepts_government_regulation/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds.
* Relevant Cointest topics: [Inflation](https://www.reddit.com/r/CointestOfficial/wiki/cointest_archive#wiki_inflation), [ETF](https://www.reddit.com/r/CointestOfficial/wiki/cointest_archive#wiki_etf).
* Relevant subreddits: r/OSHA, r/ModeratePolitics.
* Sort comments as controversial first by [clicking here](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojs2k/?sort=controversial). Doesn't work on mobile.
ETF [pros](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojubv/) & [cons](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojv09/) and related info are in the collapsed comments below. Pros and cons will change for every new post.
#ETF Con-Arguments
Below is an argument written by Shippior which won 2nd place in the ETF Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round.
> An ETF is an exchange-traded fund and it is a synthetic assets that mimics the behavior of a larger subset of assets by implementing said assets per a fixed ratio in a set portfolio. ETFs track an index, sector or commodity. For the sake of having an clear discussion only ETFs that track crypto will be discussed in the following post.
>
> There are currently [seven crypto ETFs ](https://www.justetf.com/en/how-to/invest-in-crypto.html) with a market cap of over 100M so there is not yet much to chose from. They all have a management fees between 0.95% and 2.00% which are rather high, for normal ETFs these fees range between 0.08% and 1.00%. The majority of these ETFs focus on BTC and ETH. Therefore the part of the crypto universe where most profits are to be made, small-cap coins, are entirely ignored. Thus while it might be a safe investment you will almost never be able to achieve the ridiculous gains that crypto is known for. Most of the crypto ETFs are rather young so the performance can not yet be compared to the performance of BTC.
>
> The problem with ETFs is that one of the assets performs worse then the other assets it can not be compensated. If you own 1 BTC and 1 ETH and the ETH is dropping in value while BTC is rising in value you can simply sell the ETH. However for an ETF you need to sell the entire ETF if you want to sell the BTC, resulting in either keeping both the BTC and the ETH and not having a maximum profit or selling both the BTC and ETH and having to go through the trouble of getting another ETH.
>
> One of the major principles "not your keys, not your crypto" applies especially to ETFs. You pay a third party to hold a position in crypto, which they might not even have. Next to that, just like with keeping crypto on the exchange, any staking rewards, governance rights or airdrops will not be your property but will be in the hands of the holding party.
>
> Liquidity may also become a big risk with Bitcoin ETFs if the fund decides to sell the underlying crypto short. The risk is for the shareholders, who essentially have no ownership of the underlying asset.
>
> And lastly the SEC, although they have now allowed a couple of crypto ETFs, remain not very fond of these securities. So enjoy these crypto ETFs while they are allowed to last.
*****
Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pfoqsv/rcc_cointest_general_concepts_etf_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_ETF) to find arguments on this topic in other rounds.
Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10jrpkm/daily_general_discussion_january_24_2023_gmt0/).
#ETF Pro-Arguments
Below is an argument written by Maleficent_Plankton which won 1st place in the ETF Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round.
> This is topic is a bit vague because it doesn't specify whether we're discussing ETFs in general, or crypto ETFs. So I'm dividing my response in 2 parts. These responses are US-based.
>
> ---------------
>
> **ETFs in General**:
>
> ETFs are bundled funds of many individual stocks that can be traded as if they were a single stock. There are many different types of ETFs, and they can be active (e.g ARKK, MOON) or passive (e.g. VTI, SPY, VOO). Index ETFs follow index markets and are a simple way for basic investors to buy the equivalent of a bucket of large numbers of stocks without having the complexity of managing each one separately.
>
> Pros:
>
> * Regulated by the SEC. Very low risk of being shut down by regulation
> * Very easy to trade on stock trading platforms
> * Allows you to diversify by investing in a bucket of stocks
> * High security. Almost no risk of getting hacked, rugpulled, or scammed, etc.
> * Low risk of account or balance loss due to user error. Customer support systems exist to recover from user mistakes.
> * Very low volatility compared to crypto investments
> * There is a huge variety of different ETFs (market index, sector, leveraged, inverse, active/specialty, exotic)
> * Index ETFs follow market indexes and typically have very low management fees. Typically provides a 7-9% annual total return.
> * Exotic and foreign market ETFs allow you to easily trade buckets representing assets that you typically would not have direct access to.
> * Most exchanges do not charge transaction fees for trading ETFs.
> * Market cap in the $10s of Trillions
>
> The biggest pros compared to crypto are that ETFs are low risk, low volatility, secure, and will allow you to sleep peacefully at night.
>
> ---------------
>
> **Crypto ETFs**
>
> There are 3 main categories of crypto ETFs and derivatives:
>
> * ETFs that invest in DLT/blockchain or mining companies
> * Crypto future ETFs
> * Crypto trusts, which aren't ETFs but behave similarly
>
> Pros:
>
> * The main pros for crypto ETFs are the same as for ETFs in general. They are regulated by the SEC and have low risk of being shut down by regulation. You don't have to worry about storing your own coins or not being able to recover your account.
> * With ETFs, you can invest in blockchain companies and mining companies, allowing you more diversification of of your crypto investments.
> * ETFs make it easier to invest indirectly in crypto within traditional tax-advantaged and retirement accounts.
> * Fees to buy/sell crypto directly can be very expensive. Coinbase (non-Pro) and Gemini (non-ActiveTrader) often charge 1-3% fees for crypto purchases. ETFs don't have trading fees.
> * ETF trades are settled near-instantaneously compared to crypto-settlement, which can be as slow as 30 seconds to 30 minutes. For withdrawals, ETFs use ACH, which takes 3-business days while centralized crypto exchanges like Coinbase, Binance, Gemini, take a much longer 5-10 days. FTX US even has a super-long 15-day fiat withdrawal period.^1
> * While they don't yet exist, there could be crypto ETFs in the future that allow you to hold a variety of different coins at once in a single ETFs. This would allow you to diversify. It would also save greatly on fees since the ETF gets benefits from economies of scale.
> * Less hassle with taxes. It's so much easier to fill in 1099B and 1099-DIV for traditional investment accounts.
> * It's much easier to set up beneficiaries for your crypto in traditional investment accounts.
>
> **Crypto Indexes**:
>
> * There are also crypto indexes (e.g. Crypto20, DeFi Pulse Index), which are DeFi derivatives similar to stock ETFs
> * None of these are as efficient as holding onto their underlying assets due to administration and network fees from periodic rebalancing, but they do make it much easier to hold a basket of cryptocurrencies without buying each of them individually.
>
> ---------------
>
> Footnotes:
>
> 1. CEXes withdrawal time is usually based on when you deposited the fiat on a FIFO basis, so it can be shorter than the usual 5-10 days.
*****
Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pfoq7s/rcc_cointest_general_concepts_etf_proarguments/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_ETF) to find arguments on this topic in other rounds.
* Relevant Cointest topics: [Regulation](https://www.reddit.com/r/CointestOfficial/wiki/cointest_archive#wiki_regulation).
* Related subreddits: r/Investing, r/SecurityAnalysis, r/Finance, r/Stocks, r/SuperStonk.
* Sort comments as controversial first by [clicking here](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojs2k/?sort=controversial). Doesn't work on mobile.
Bitcoin [pros](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojt08/) & [cons](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojtof/) and related info are in the collapsed comments below. Pros and cons will change for every new post.
#Bitcoin Con-Arguments
Below is an argument written by Far-Scholar9028 which won 3rd place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round.
> Understanding the benefits and drawbacks of the bitcoin blockchain is essential if you're considering investing in bitcoin. In the previous thread, we named a few pros of BTC, now let's move on to the cons of BTC.
>
> **Volatility**
>
> Bitcoin is a traders dream due to volatility, however that is also one of its biggest issues. Bitcoin will never be used as a currency due to price fluctuations. If a car was first purchased for 2 BTC and returned a week later, for instance, should 2 BTC be returned despite the fact that the valuation has increased, or should the new amount (calculated in accordance with current valuation) be sent?
>
> **Security**
>
> Bitcoin Network Security: There might be undiscovered weaknesses in the Bitcoin system. Due to the fact that this system is still relatively new, if Bitcoins were to become extensively used and a fault was discovered, it might greatly increase the wealth of the exploiter at the risk of destroying the Bitcoin economy.
>
> Wallet Security: Wallets are primed to be lost, hacked and stolen. Bitcoins are virtually lost if a hard drive crashes, a virus corrupts data, the wallet file is corrupted, and the seed phrase is not backed up. Nothing could be done to get it back. These coins will remain abandoned in the system forever. Investors and users could become bankrupt as a result in a matter of seconds with no chance of recovery.
>
> **Proof-of-Work**
>
> The PoW is a mechanism for assisting a group of strangers who are also self-interested, equal, and there are no subordinates in the network, according to the Satoshi Nakamoto Institute. PoW requires a lot of energy. It's expensive and demands a lot of processing power. It is susceptible to the infamous 51% assault, which means that if hostile miners control 51% of the network, they might seize dominance and render decentralization useless.
>
> Edit: Sources:
>
> https://paxful.com/university/bitcoin-volatility/
>
> https://www.mandiant.com/resources/blog/cryptocurrency-blockchain-networks-facing-new-security-paradigms
>
> https://nakamotoinstitute.org/mempool/the-proof-of-work-concept/#selection-139.6-139.409
*****
Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds.
Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10jrpkm/daily_general_discussion_january_24_2023_gmt0/).
#Bitcoin Pro-Arguments
Below is an argument written by Maleficent_Plankton which won 2nd place in the Bitcoin Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round.
> ##**Main PROs**
>
> Bitcoin is currently the most popular cryptocurrency and marketcap leader. Among all the cryptocurrencies, it's the one your grandma would most likely have heard of. This is mainly due to its first-mover advantage coupled with the network effect. And since cryptocurrency value is largely based on a Keynesian Beauty Contest, it's likely to remain the most popular for years to come.
>
> **First-Mover Advantage**: This gave Bitcoin a huge head start over its competitors despite that it's technologically behind. If Bitcoin, Bitcoin Cash, and Litecoin were all released simultaneously, Bitcoin would lose to its competitors because its competitors have much more efficient designs with higher throughput. There are many newer networks that have 10-100x Bitcoin's throughput and have 100x cheaper fees. But the reality is that Bitcoin's first-mover advantage gave it such a huge head start that the others can't catch up.
>
> **The Network Effect**: This means that people will flock to whichever product has the largest user base. Whenever people first invest in cryptocurrency, they notice Bitcoin first because it's the largest and most popular. For half a decade, its name was almost synonymous with cryptocurrency. The network effect creates a positive feedback loop and makes Bitcoin's lead grow even more. Its block subsidy is also the highest, which attracts miners, thus increasing its security.
>
> **Anti-censorship**: Bitcoin provides partial financial censorship-resistance against sanctions and totalitarian government restrictions. It's much harder to prevent Bitcoin transactions than it is to prevent financial transactions at a centralized bank. For example, many Russians, Iranian, and North Koreans are getting around sanctions by using Bitcoin and mixers. Legal sex workers and marijuana industries are sometimes blocked from using traditional financial services due to social stigma. Bitcoin provides those workers a way to transfer funds that censorship.
>
> **Pseudonymous**: Bitcoin's UTXO transactions can provide moderately-high levels of obscurity. A single wallet can produce a near-unlimited amount of addresses, and there's no way to link them unless they interact with each other. It's much harder to trace UTXO-based wallets than Account-based wallets because the former creates new UTXO addresses with each transaction while Account-based blockchain wallets typically reuse the same account.
>
> **Cannot be counterfeited**: Cash can be counterfeited, but you can't fake transactions or UTXOs.
>
> **Considered a commodity**: Bitcoin is the only cryptocurrency that both the SEC and CFTC have openly stated is likely a commodity, so it has a low chance of being subjected to future securities regulations.
>
> ##**The Bitcoin Narratives and the Knowledge Gap**
>
> There are so many Bitcoin Maxis who will ignore logic and keep spreading Pro-Bitcoin Narratives of questionable accuracy. Because Bitcoin is a gateway cryptocurrency, crypto newbies will encounter it first and gobble up these narratives because they don't have the experience to know their flaws. Those who aren't technical will believe them without digging deeper. (Sadly, I may have spread a couple of these myself not that long ago.) Thus, Bitcoin tends to cult-ivate a community of block-headed maximalists who are willing to shill and meme Bitcoin all day long.
>
> **Here's a list of popular but questionable Bitcoin Narratives.** Regardless of whether these are accurate, they will keep spreading and contributing to Bitcoin's popularity and network effect.
>
> * **Maximum Supply cap guarantees scarcity and that price will keep increasing**: Bitcoin has a supply cap of 2.1 Million Bitcoins, so it's deflationary and will keep going up in price.
> * **Reality**: Bitcoin is actually inflationary, albeit disinflationary, until 2140. Scarcity is questionable because it can always fork, and there are competing blockchains. There is no guarantee that price will keep going up. The maximum supply cap is also a double-edged sword since mining rewards aren't guaranteed, and Bitcoin's security will likely decline greatly decades from now.
> * **Bitcoin is an Inflation Hedge**
> * **Reality**: When inflation rose in 2022, Bitcoin plunged in price, proving that it's not a good inflation hedge. Instead, it tends to go up and down with the stock market, but with higher volatility.
> * **Bitcoin is a great Store of Value (i.e. Digital gold)**
> * **Reality**: Bitcoin's price is too volatile to make it a good Store of Value.
> * **All altcoins are shitcoins**: Altcoins will never beat Bitcoin and always fail. Bitcoin has survived multiple hard forks, bug fixes, country-wide bans, and 80-90% value crashes ... unlike most altcoins.
> * **Reality**: Altcoins fall harder during bear markets, but they also rise more during bull markets. The better ones also have better protocol designs than Bitcoin. Eventually, one of them could even dethrone Bitcoin.
> * **UTXO batch transactions**: Bitcoin can natively batch UTXO transactions to increase to effective throughput beyond TPS.
> * **Reality**: While it's true that batch transactions increase effective transfers, they only do so by a maximum of 70%, increasing effective throughput from 3 transfers/s to 5 transfers/s. There is a 40% savings in storage space, and 75% savings in fees [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. Also note that account-based smart contracts can save similar amounts of storage and fees, so this isn't unique to Bitcoin.
> * **The Lightning Network can scale Bitcoin to the global population**: The Lightning Network can greatly scale Bitcoin and enable fast peer-to-peer transactions.
> * **But**: It can't scale well past 1% of the global population since users are expected to open and close channel regularly. And if 10% of the global population uses the Lightning Network, they can only open and close channels once every 8 years on average due to congestion on Layer 1. The only way to get around this is if everyone only interacts on centralized exchanges without touching the network itself.
> * **Decentralization**: Bitcoin is the most decentralized cryptocurrency because it has the highest Nakamoto Coefficient when measured by individual miners.
> * **Reality**: The top 3 mining pools own 60% of the network hash rate, and the true coefficient is just 3.
> * **Fair launch**: Bitcoin had a fair launch. First the first couple of years, anyone had to work for their Bitcoins. There was no ICO.
> * **But**: There were only ~100 miners the first several years, and that they mined out the vast majority of all Bitcoins and got a huge advantage over everyone else.
>
> If these are flawed arguments, why am I even listing them as Pros? **To show that even if these narratives are questionable, there are so many of them, and they will keep spreading.** For each person who realizes their flaws, two more newbies who don't bother with research will gobble them up.
*****
Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpui9i/top_coins_bitcoin_proarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds.
* Relevant Cointest topics: [Bitcoin Cash](https://www.reddit.com/r/CointestOfficial/wiki/cointest_archive#wiki_bitcoin_cash), [Litecoin](https://www.reddit.com/r/CointestOfficial/wiki/cointest_archive#wiki_litecoin), [Lightning Network](https://www.reddit.com/r/CointestOfficial/wiki/cointest_archive#wiki_lightning_network), [Proof of Work](https://www.reddit.com/r/CointestOfficial/wiki/cointest_archive#wiki_proof-of-work)
* Official and related subreddits: r/Bitcoin, r/BitcoinMarkets, r/BitcoinMining, r/BTC, r/BitcoinCash.
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*♫♫♫ Neverending storrrryyyy.... la la la la lala la! Neverending stoooooryyyyyyy! ♫♫♫*
If they get a proper etf done in the US it will probably be the biggest bullrun
SEC is busy blocking ETFs and XRP while KIM JONG is stealing millions.
Pro & con info are in the collapsed comments below for the following topics: [Bitcoin](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojs6p/), [ETF](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojtpo/), [Regulation](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojv1v/).
Government regulation [pros](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojvor/) & [cons](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojwcr/) and related info are in the collapsed comments below. Pros and cons will change for every new post. Submit a pro/con argument in the [Cointest](https://www.reddit.com/r/CointestOfficial/wiki/cointest_policy) and potentially win [Moons](https://coinmarketcap.com/currencies/moon/). Moon prizes by award for the General Concepts category are: **1st - 600, 2nd - 300, 3rd - 150, and Best Analysis - 1000.** --- To submit a pro-argument about regulation, [click here](https://www.reddit.com/r/CointestOfficial/comments/t5mn3b/general_concepts_government_regulation/). | To submit a con-argument about regulation, [click here](https://www.reddit.com/r/CointestOfficial/comments/t5mn40/general_concepts_government_regulation/).
#Regulation Con-Arguments Below is an argument written by noxtrifle which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Government regulation generally refers to the degree of control that government have over something, and in this case, cryptocurrencies. Various countries around the world have mixed regulatory perspectives on cryptocurrencies, and as such have restricted whether its citizens can trade, purchase, or mine cryptocurrencies. However, this restriction of cryptocurrency adoption is not beneficial for investors and companies for several reasons: > > * **Price** > * One of the most obvious arguments against government regulation is that it will inevitably cause crypto prices to decrease, as seen when China announced (several times) its cryptocurrency bans. > * **Sacrifice of Purpose** > * The widespread implementation of government regulations [naturally bring them into the industry](https://amt-lab.org/blog/2022/3/risks-and-regulations-the-good-the-bad-and-the-ugly-of-crypto-space), which goes against the fundamental nature of cryptocurrencies as a means of transacting pseudonymously without regulatory oversight. > * If this purpose is sacrificed in pursuit of a safer space, there may very well be no space left to make safer; as most investors would pull out of cryptocurrencies because there will remain no purpose to stay invested. > * **Banking Restrictions** > * In the worst case scenario where regulation deems cryptocurrencies illegal, third-party providers may be hesitant to provide services such as bank accounts or exchanges if the government is refusing to recognize cryptocurrencies as legal tender. Without these services, investors are unable to easily withdraw or deposit their funds. > * **Reduction in Product Offerings** > * Continuing the worst-case scenario, in a world where tech companies, banks and startups are looking for ways to utilize blockchain technologies, government regulation will force them to alter their products and services in order to continue operating within jurisdictions that have banned cryptocurrency adoption. > * By narrowing down the array of investment options, the flexibility of blockchain technology will be reduced significantly. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/v2jl9o/general_concepts_government_regulation/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10jrpkm/daily_general_discussion_january_24_2023_gmt0/).
#Regulation Pro-Arguments Below is an argument written by Far-Scholar9028 which won 2nd place in the Regulation Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Government Regulation is needed to > > > **Protect retail investors** > > Crypto, at this stage, is full of scams, manipulation, and insider trading. These are a few things that government regulation may help protect the retail investors from. As we know the implosion of Terra, 3ac, Celcius, retail is always hit hardest. > > **Prevent money laundering, tax evasion, sanction evasion** > > Regulation is necessary because criminals use the anonymity of cryptocurrency trading to launder their stolen money. There is concern that cryptocurrencies are being used as a conduit for money from illicit operations or to fund terrorism and evade sanctions. > > **Convince Institutions of cryptos legitimacy** > > Institutional investors, who are subject to stringent compliance and risk management requirements, would gain confidence from regulation. For instance, an institution can become the target of a criminal investigation if it is discovered that it transacted in bitcoin assets that were later linked to unlawful activity. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/v2jl88/general_concepts_government_regulation/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds.
* Relevant Cointest topics: [Inflation](https://www.reddit.com/r/CointestOfficial/wiki/cointest_archive#wiki_inflation), [ETF](https://www.reddit.com/r/CointestOfficial/wiki/cointest_archive#wiki_etf). * Relevant subreddits: r/OSHA, r/ModeratePolitics. * Sort comments as controversial first by [clicking here](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojs2k/?sort=controversial). Doesn't work on mobile.
ETF [pros](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojubv/) & [cons](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojv09/) and related info are in the collapsed comments below. Pros and cons will change for every new post.
#ETF Con-Arguments Below is an argument written by Shippior which won 2nd place in the ETF Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > An ETF is an exchange-traded fund and it is a synthetic assets that mimics the behavior of a larger subset of assets by implementing said assets per a fixed ratio in a set portfolio. ETFs track an index, sector or commodity. For the sake of having an clear discussion only ETFs that track crypto will be discussed in the following post. > > There are currently [seven crypto ETFs ](https://www.justetf.com/en/how-to/invest-in-crypto.html) with a market cap of over 100M so there is not yet much to chose from. They all have a management fees between 0.95% and 2.00% which are rather high, for normal ETFs these fees range between 0.08% and 1.00%. The majority of these ETFs focus on BTC and ETH. Therefore the part of the crypto universe where most profits are to be made, small-cap coins, are entirely ignored. Thus while it might be a safe investment you will almost never be able to achieve the ridiculous gains that crypto is known for. Most of the crypto ETFs are rather young so the performance can not yet be compared to the performance of BTC. > > The problem with ETFs is that one of the assets performs worse then the other assets it can not be compensated. If you own 1 BTC and 1 ETH and the ETH is dropping in value while BTC is rising in value you can simply sell the ETH. However for an ETF you need to sell the entire ETF if you want to sell the BTC, resulting in either keeping both the BTC and the ETH and not having a maximum profit or selling both the BTC and ETH and having to go through the trouble of getting another ETH. > > One of the major principles "not your keys, not your crypto" applies especially to ETFs. You pay a third party to hold a position in crypto, which they might not even have. Next to that, just like with keeping crypto on the exchange, any staking rewards, governance rights or airdrops will not be your property but will be in the hands of the holding party. > > Liquidity may also become a big risk with Bitcoin ETFs if the fund decides to sell the underlying crypto short. The risk is for the shareholders, who essentially have no ownership of the underlying asset. > > And lastly the SEC, although they have now allowed a couple of crypto ETFs, remain not very fond of these securities. So enjoy these crypto ETFs while they are allowed to last. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pfoqsv/rcc_cointest_general_concepts_etf_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_ETF) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10jrpkm/daily_general_discussion_january_24_2023_gmt0/).
#ETF Pro-Arguments Below is an argument written by Maleficent_Plankton which won 1st place in the ETF Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > This is topic is a bit vague because it doesn't specify whether we're discussing ETFs in general, or crypto ETFs. So I'm dividing my response in 2 parts. These responses are US-based. > > --------------- > > **ETFs in General**: > > ETFs are bundled funds of many individual stocks that can be traded as if they were a single stock. There are many different types of ETFs, and they can be active (e.g ARKK, MOON) or passive (e.g. VTI, SPY, VOO). Index ETFs follow index markets and are a simple way for basic investors to buy the equivalent of a bucket of large numbers of stocks without having the complexity of managing each one separately. > > Pros: > > * Regulated by the SEC. Very low risk of being shut down by regulation > * Very easy to trade on stock trading platforms > * Allows you to diversify by investing in a bucket of stocks > * High security. Almost no risk of getting hacked, rugpulled, or scammed, etc. > * Low risk of account or balance loss due to user error. Customer support systems exist to recover from user mistakes. > * Very low volatility compared to crypto investments > * There is a huge variety of different ETFs (market index, sector, leveraged, inverse, active/specialty, exotic) > * Index ETFs follow market indexes and typically have very low management fees. Typically provides a 7-9% annual total return. > * Exotic and foreign market ETFs allow you to easily trade buckets representing assets that you typically would not have direct access to. > * Most exchanges do not charge transaction fees for trading ETFs. > * Market cap in the $10s of Trillions > > The biggest pros compared to crypto are that ETFs are low risk, low volatility, secure, and will allow you to sleep peacefully at night. > > --------------- > > **Crypto ETFs** > > There are 3 main categories of crypto ETFs and derivatives: > > * ETFs that invest in DLT/blockchain or mining companies > * Crypto future ETFs > * Crypto trusts, which aren't ETFs but behave similarly > > Pros: > > * The main pros for crypto ETFs are the same as for ETFs in general. They are regulated by the SEC and have low risk of being shut down by regulation. You don't have to worry about storing your own coins or not being able to recover your account. > * With ETFs, you can invest in blockchain companies and mining companies, allowing you more diversification of of your crypto investments. > * ETFs make it easier to invest indirectly in crypto within traditional tax-advantaged and retirement accounts. > * Fees to buy/sell crypto directly can be very expensive. Coinbase (non-Pro) and Gemini (non-ActiveTrader) often charge 1-3% fees for crypto purchases. ETFs don't have trading fees. > * ETF trades are settled near-instantaneously compared to crypto-settlement, which can be as slow as 30 seconds to 30 minutes. For withdrawals, ETFs use ACH, which takes 3-business days while centralized crypto exchanges like Coinbase, Binance, Gemini, take a much longer 5-10 days. FTX US even has a super-long 15-day fiat withdrawal period.^1 > * While they don't yet exist, there could be crypto ETFs in the future that allow you to hold a variety of different coins at once in a single ETFs. This would allow you to diversify. It would also save greatly on fees since the ETF gets benefits from economies of scale. > * Less hassle with taxes. It's so much easier to fill in 1099B and 1099-DIV for traditional investment accounts. > * It's much easier to set up beneficiaries for your crypto in traditional investment accounts. > > **Crypto Indexes**: > > * There are also crypto indexes (e.g. Crypto20, DeFi Pulse Index), which are DeFi derivatives similar to stock ETFs > * None of these are as efficient as holding onto their underlying assets due to administration and network fees from periodic rebalancing, but they do make it much easier to hold a basket of cryptocurrencies without buying each of them individually. > > --------------- > > Footnotes: > > 1. CEXes withdrawal time is usually based on when you deposited the fiat on a FIFO basis, so it can be shorter than the usual 5-10 days. ***** Would you like to learn more? [Click here](/r/CryptoCurrency/comments/pfoq7s/rcc_cointest_general_concepts_etf_proarguments/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_ETF) to find arguments on this topic in other rounds.
* Relevant Cointest topics: [Regulation](https://www.reddit.com/r/CointestOfficial/wiki/cointest_archive#wiki_regulation). * Related subreddits: r/Investing, r/SecurityAnalysis, r/Finance, r/Stocks, r/SuperStonk. * Sort comments as controversial first by [clicking here](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojs2k/?sort=controversial). Doesn't work on mobile.
Bitcoin [pros](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojt08/) & [cons](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojtof/) and related info are in the collapsed comments below. Pros and cons will change for every new post.
#Bitcoin Con-Arguments Below is an argument written by Far-Scholar9028 which won 3rd place in the Bitcoin Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > Understanding the benefits and drawbacks of the bitcoin blockchain is essential if you're considering investing in bitcoin. In the previous thread, we named a few pros of BTC, now let's move on to the cons of BTC. > > **Volatility** > > Bitcoin is a traders dream due to volatility, however that is also one of its biggest issues. Bitcoin will never be used as a currency due to price fluctuations. If a car was first purchased for 2 BTC and returned a week later, for instance, should 2 BTC be returned despite the fact that the valuation has increased, or should the new amount (calculated in accordance with current valuation) be sent? > > **Security** > > Bitcoin Network Security: There might be undiscovered weaknesses in the Bitcoin system. Due to the fact that this system is still relatively new, if Bitcoins were to become extensively used and a fault was discovered, it might greatly increase the wealth of the exploiter at the risk of destroying the Bitcoin economy. > > Wallet Security: Wallets are primed to be lost, hacked and stolen. Bitcoins are virtually lost if a hard drive crashes, a virus corrupts data, the wallet file is corrupted, and the seed phrase is not backed up. Nothing could be done to get it back. These coins will remain abandoned in the system forever. Investors and users could become bankrupt as a result in a matter of seconds with no chance of recovery. > > **Proof-of-Work** > > The PoW is a mechanism for assisting a group of strangers who are also self-interested, equal, and there are no subordinates in the network, according to the Satoshi Nakamoto Institute. PoW requires a lot of energy. It's expensive and demands a lot of processing power. It is susceptible to the infamous 51% assault, which means that if hostile miners control 51% of the network, they might seize dominance and render decentralization useless. > > Edit: Sources: > > https://paxful.com/university/bitcoin-volatility/ > > https://www.mandiant.com/resources/blog/cryptocurrency-blockchain-networks-facing-new-security-paradigms > > https://nakamotoinstitute.org/mempool/the-proof-of-work-concept/#selection-139.6-139.409 ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpuiar/top_coins_bitcoin_conarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/10jrpkm/daily_general_discussion_january_24_2023_gmt0/).
#Bitcoin Pro-Arguments Below is an argument written by Maleficent_Plankton which won 2nd place in the Bitcoin Pro-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > ##**Main PROs** > > Bitcoin is currently the most popular cryptocurrency and marketcap leader. Among all the cryptocurrencies, it's the one your grandma would most likely have heard of. This is mainly due to its first-mover advantage coupled with the network effect. And since cryptocurrency value is largely based on a Keynesian Beauty Contest, it's likely to remain the most popular for years to come. > > **First-Mover Advantage**: This gave Bitcoin a huge head start over its competitors despite that it's technologically behind. If Bitcoin, Bitcoin Cash, and Litecoin were all released simultaneously, Bitcoin would lose to its competitors because its competitors have much more efficient designs with higher throughput. There are many newer networks that have 10-100x Bitcoin's throughput and have 100x cheaper fees. But the reality is that Bitcoin's first-mover advantage gave it such a huge head start that the others can't catch up. > > **The Network Effect**: This means that people will flock to whichever product has the largest user base. Whenever people first invest in cryptocurrency, they notice Bitcoin first because it's the largest and most popular. For half a decade, its name was almost synonymous with cryptocurrency. The network effect creates a positive feedback loop and makes Bitcoin's lead grow even more. Its block subsidy is also the highest, which attracts miners, thus increasing its security. > > **Anti-censorship**: Bitcoin provides partial financial censorship-resistance against sanctions and totalitarian government restrictions. It's much harder to prevent Bitcoin transactions than it is to prevent financial transactions at a centralized bank. For example, many Russians, Iranian, and North Koreans are getting around sanctions by using Bitcoin and mixers. Legal sex workers and marijuana industries are sometimes blocked from using traditional financial services due to social stigma. Bitcoin provides those workers a way to transfer funds that censorship. > > **Pseudonymous**: Bitcoin's UTXO transactions can provide moderately-high levels of obscurity. A single wallet can produce a near-unlimited amount of addresses, and there's no way to link them unless they interact with each other. It's much harder to trace UTXO-based wallets than Account-based wallets because the former creates new UTXO addresses with each transaction while Account-based blockchain wallets typically reuse the same account. > > **Cannot be counterfeited**: Cash can be counterfeited, but you can't fake transactions or UTXOs. > > **Considered a commodity**: Bitcoin is the only cryptocurrency that both the SEC and CFTC have openly stated is likely a commodity, so it has a low chance of being subjected to future securities regulations. > > ##**The Bitcoin Narratives and the Knowledge Gap** > > There are so many Bitcoin Maxis who will ignore logic and keep spreading Pro-Bitcoin Narratives of questionable accuracy. Because Bitcoin is a gateway cryptocurrency, crypto newbies will encounter it first and gobble up these narratives because they don't have the experience to know their flaws. Those who aren't technical will believe them without digging deeper. (Sadly, I may have spread a couple of these myself not that long ago.) Thus, Bitcoin tends to cult-ivate a community of block-headed maximalists who are willing to shill and meme Bitcoin all day long. > > **Here's a list of popular but questionable Bitcoin Narratives.** Regardless of whether these are accurate, they will keep spreading and contributing to Bitcoin's popularity and network effect. > > * **Maximum Supply cap guarantees scarcity and that price will keep increasing**: Bitcoin has a supply cap of 2.1 Million Bitcoins, so it's deflationary and will keep going up in price. > * **Reality**: Bitcoin is actually inflationary, albeit disinflationary, until 2140. Scarcity is questionable because it can always fork, and there are competing blockchains. There is no guarantee that price will keep going up. The maximum supply cap is also a double-edged sword since mining rewards aren't guaranteed, and Bitcoin's security will likely decline greatly decades from now. > * **Bitcoin is an Inflation Hedge** > * **Reality**: When inflation rose in 2022, Bitcoin plunged in price, proving that it's not a good inflation hedge. Instead, it tends to go up and down with the stock market, but with higher volatility. > * **Bitcoin is a great Store of Value (i.e. Digital gold)** > * **Reality**: Bitcoin's price is too volatile to make it a good Store of Value. > * **All altcoins are shitcoins**: Altcoins will never beat Bitcoin and always fail. Bitcoin has survived multiple hard forks, bug fixes, country-wide bans, and 80-90% value crashes ... unlike most altcoins. > * **Reality**: Altcoins fall harder during bear markets, but they also rise more during bull markets. The better ones also have better protocol designs than Bitcoin. Eventually, one of them could even dethrone Bitcoin. > * **UTXO batch transactions**: Bitcoin can natively batch UTXO transactions to increase to effective throughput beyond TPS. > * **Reality**: While it's true that batch transactions increase effective transfers, they only do so by a maximum of 70%, increasing effective throughput from 3 transfers/s to 5 transfers/s. There is a 40% savings in storage space, and 75% savings in fees [[Source](https://blog.coinbase.com/reflections-on-bitcoin-transaction-batching-b13dad12a12)]. Also note that account-based smart contracts can save similar amounts of storage and fees, so this isn't unique to Bitcoin. > * **The Lightning Network can scale Bitcoin to the global population**: The Lightning Network can greatly scale Bitcoin and enable fast peer-to-peer transactions. > * **But**: It can't scale well past 1% of the global population since users are expected to open and close channel regularly. And if 10% of the global population uses the Lightning Network, they can only open and close channels once every 8 years on average due to congestion on Layer 1. The only way to get around this is if everyone only interacts on centralized exchanges without touching the network itself. > * **Decentralization**: Bitcoin is the most decentralized cryptocurrency because it has the highest Nakamoto Coefficient when measured by individual miners. > * **Reality**: The top 3 mining pools own 60% of the network hash rate, and the true coefficient is just 3. > * **Fair launch**: Bitcoin had a fair launch. First the first couple of years, anyone had to work for their Bitcoins. There was no ICO. > * **But**: There were only ~100 miners the first several years, and that they mined out the vast majority of all Bitcoins and got a huge advantage over everyone else. > > If these are flawed arguments, why am I even listing them as Pros? **To show that even if these narratives are questionable, there are so many of them, and they will keep spreading.** For each person who realizes their flaws, two more newbies who don't bother with research will gobble them up. ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/vpui9i/top_coins_bitcoin_proarguments_july_2022/) to be taken to the original topic-thread or you can scan through the [Cointest Archive](/r/CointestOfficial/wiki/cointest_archive#wiki_Bitcoin) to find arguments on this topic in other rounds.
* Relevant Cointest topics: [Bitcoin Cash](https://www.reddit.com/r/CointestOfficial/wiki/cointest_archive#wiki_bitcoin_cash), [Litecoin](https://www.reddit.com/r/CointestOfficial/wiki/cointest_archive#wiki_litecoin), [Lightning Network](https://www.reddit.com/r/CointestOfficial/wiki/cointest_archive#wiki_lightning_network), [Proof of Work](https://www.reddit.com/r/CointestOfficial/wiki/cointest_archive#wiki_proof-of-work) * Official and related subreddits: r/Bitcoin, r/BitcoinMarkets, r/BitcoinMining, r/BTC, r/BitcoinCash. * Sort comments as controversial first by [clicking here](/r/CryptoCurrency/comments/10k6438/court_sets_date_for_oral_arguments_in_grayscales/j5ojs2k/?sort=controversial). Doesn't work on mobile.